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BSE Sensex rises 1.5 pct to 10-week closing high
January 24, 2012 / 10:53 AM / 6 years ago

BSE Sensex rises 1.5 pct to 10-week closing high

NEW DELHI (Reuters) - The BSE Sensex rose 1.46 percent on Tuesday to its highest close in 10 weeks, after the Reserve Bank of India signalled a policy shift towards reviving growth, boosting appetite for stocks in Asia’s third largest economy.

People walk past the Bombay Stock Exchange (BSE) building in Mumbai January 9, 2009. REUTERS/Punit Paranjpe/Files

Banks led the gains after the RBI cut the cash reserve ratio, or the proportion of deposits that commercial banks must keep with the RBI, to ease tight liquidity.

Top lender State bank of India rose 5.2 percent, while ICICI Bank (ICBK.NS) gained 3.7 percent. Smaller rival HDFC Bank (HDBK.NS) closed 1 percent higher.

The market rose on hopes that a cut in the CRR will soon lead to softening of interest rates, said Taina Erajuuri, a Helsinki-based portfolio manager at FIM India.

“They (RBI) gave an indication that there could be a repo rate cut somewhere in the future and I think that’s important. We will probably see a 25 basis point cut in March or April,” Erajuuri said.

The main 30-share BSE index closed 244.04 points up at 16,995.77, its highest closing level since November 14. More than two-thirds of its components ended in the green.

The index has gained nearly 10 percent so far in January.

“February always seems to be a nasty month. We will probably see profit-taking coming in easily in February,” Erajuuri, however, said.

Larsen & Toubro Ltd (LART.NS), India’s biggest engineering conglomerate, rose 5.8 percent to 1,351.85 rupees, and was the biggest contributor to the gains in the benchmark index.

The company posted better-than-expected results on Monday, mainly on account of a rise in treasury income and larger dividend payouts from its units.

Reliance Industries (RELI.NS), India’s top listed firm and which contributes about a tenth to the benchmark, gained 1.6 percent after the energy major said it will open its share buyback from February 1, and close the offer on January 19 next year.

Strides Arcolab STAR.NS jumped 17.5 percent to 478.50 rupees after Watson Pharmaceuticals WPI.N agreed to buy the company’s Australian and Southeast Asian generic pharmaceutical business.

    The 50-share NSE index rose 1.61 percent to 5,127.35 points. There were about 1.6 gainers for every loser in the broader market. About 874.3 million shares changed hands.

    Indian shares rose in contrast to global markets, with European shares opening lower after the region’s finance ministers rejected an offer by private creditors to restructure their Greek debt, raising the spectre of a messy default.

    At 1017 GMT, the FTSEurofirst 300 index of top European shares was down 0.73 percent. World stocks, as measured by the MSCI world equity index, fell 0.29 percent.


    * Software company KPIT Cummins Infosystems (KPIT.NS) rose 4 percent after its board approved a one-for-one bonus share issue.

    * Essar Oil ESRO.NS rose 16.7 percent after the company said its coal-bed methane block at Raniganj in West Bengal state holds an estimated 113 billion cubic feet of gas reserves.

    Editing by Aradhana Aravindan

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